Just when you thought you had heard the last of COVID-related legal developments, the Ontario Court of Appeal released its decision in the case of Croke v VuPoint System Ltd, 2024 ONCA 354 (“Croke”), affirming that an employee’s refusal to get vaccinated constituted frustration of contract. Frustration occurs when a contract becomes impossible to perform due to circumstances outside the control of either party.
Frustration of Contract in Employment Law
In the employment context, frustration often revolves around disability – when an employee becomes disabled and unable to return to work for the foreseeable future, the contract is frustrated. When an employment contract is frustrated, the employee receives only their employment standards termination entitlements; they are not entitled to compensation pursuant to common law.
Aside from disability, we often see frustration when an employee is no longer certified to perform the work they were contracted for, such as from a change in regulatory requirements. Frustration can also occur if an employee refuses to get vaccinated, and being vaccinated is akin to a regulatory requirement. This was the case in Croke.
Croke v VuPoint Systems Ltd.
When we covered the issue of frustration and the Croke trial decision, we noted that the trial decision was a bit surprising because the Superior Court of Justice found frustration when it could have framed the matter as a dismissal for just cause.
The Court of Appeal agreed that there was frustration in this case, by way of Bell – a third party – imposing a vaccine policy on VuPoint, Croke’s employer, who subsequently implemented its own vaccine policy. Since Bell accounted for 99% of VuPoint’s business, it had no work to give Croke once he took the position that he would not get vaccinated, and claimed that the contract was frustrated. Consequently, Croke’s inability to do any work for VuPoint for the foreseeable future immediately altered the circumstances of the parties, and his continued employment became impossible.
This decision confirms that Bell’s vaccination policy was the decisive factor, rather than Croke’s decision not to get vaccinated. As such, the circumstances were outside of the control of either party and the matter was best approached from a frustration analysis.
The Upshot
While vaccine mandates are no longer a hot topic, this decision reminds us that frustration can be tricky to approach. Although frustration results in the immediate discharge of the contract, an employer who claims frustration but does not give the employee advance notice, or an opportunity to rectify their inability to work, may not be able to establish frustration later.
Whether you’re an employee or an employer, we can help you navigate frustration, and other employment law matters. As the saying goes: if you think you need an employment lawyer, you probably do!
